The North American potato industry is undergoing a difficult financial
period. Sales of potatoes at processing and retail have been declining
throughout North America, largely as a result of consumers experimenting
with low carbohydrate diets. Until this trend changes, the entire
North American industry will need to work together to find solutions
to surplus inventories or they will have to reduce production. Lower
prices to producers are not an option as current producer returns
are already causing extensive financial hardship for producers on
both sides of the border. One way we suggest the U.S. and Canadian
industries can work together to improve potato consumption is through
a marketing effort to promote the nutritional value of potato products
and jointly combat the low-carb craze. The U.S. levies a check-off
on all imported potatoes and potato products, including those from
Canada, which can be used to fund such promotional efforts. While
Canada has no such check-off program on imports, perhaps there are
ways to combine our resources for a common purpose.
It is not surprising during times like these that the level of infighting
and rhetoric increases. We have always valued our working relationship
with the U.S. potato industry, but Canadian potato producers are becoming
increasingly dismayed by the unsubstantiated and incorrect rhetoric
that has surfaced in the U.S. recently. This rhetoric has been blaming
Canadian potato producers for all the ills of the U.S. industry. I
say they are watching too much South Park, as this is clearly not
a case of blame Canada. For the record, Idaho produces almost equal
to the same acreage as all of Canada, and U.S. potatoes and potato
products are marketed throughout Canada.
The Canadian Horticultural Council Potato Committee and the U.S. National
Potato Council meet annually in November to discuss issues that affect
us all. Some of the decisions that come from these meetings may not
be easy for all potato producing regions in North America to accept,
but after thorough examination, decisions are made that reflect what
would be best for the entire potato industry in both countries. Historically,
we have had a positive working relationship.
The Canadian and US Potato Committees spent considerable time in 1999,
at the request of US Agriculture Secretary Dan Glickman and Canadian
Agriculture Minister Lyle Vanclief, to review the issue of regulatory
differences and restrictions affecting bilateral trade in potatoes,
and how these issues might be addressed with a view to facilitating
trade. The final report was agreed to and signed by both the Canadian
and US potato industry, and presented to our respective governments
in September 1999. The report contained recommendations on nine separate
issues affecting trade, including agreements on the various issues
that are again being raised by the US industry. The Canadian industry
continues to endorse this report. As many of the present members of
the NPC were also signatories to the report, we assume that the endorsement
of the U.S. industry also remains.
The Canadian industry is committed to investigating any irregularities
that affect trade between the two countries. We have yet to receive
a documented complaint. In a recent situation that was particularly
concerning, the Canadian industry actually requested documentation
supporting the allegations so that we could conduct an internal investigation.
We have yet to receive the requested documentation; however, the allegations
continue.
In recent articles, the Canadian industry has been accused of an unfair
regulatory system, of unfair subsidies, of unfair dumping duties,
and even for influencing Canada’s monetary policy to facilitate
trade. All of these allegations are false. Recent accusations by Sen.
Collins of Maine that Prince Edward Island potato producers received
subsidies for a crop produced in the 2000 season are untrue and not
based on the facts. In fact, various U.S. governments, state and federal,
have contributed to surplus removal programs on behalf of the U.S.
potato industry. To use a 4-year-old false allegation as a basis for
the initiation of an USTR investigation is politics at its worst –
and a waste of time and resources for industry in both countries.
With regards to unfair regulatory systems, the statements again are
incorrect. The fact is that the Canadian and U.S. industries reviewed
each others’ regulatory systems in 1999. We both acknowledged
the value of Marketing Orders in the United States, and the Canadian
Ministerial Exemption process. We agreed that the systems should remain
in place as long they are not, in the case of Marketing orders, made
more restrictive, and in the case of Ministerial exemptions, used
as a barrier to trade. This joint position was reviewed and reaffirmed
in 2002. Furthermore, each industry agreed to produce a document which
clearly outlines the respective regulations in a short, concise, easy
to understand document. The purpose of this exercise was to further
assist the understanding of each others’ regulatory system,
so that we could distribute this information and educate our respective
members. The Canadian document was completed as committed; the U.S.
document has still not been completed or disclosed. The failure of
the U.S. to abide by its commitment has affected the spirit of cooperation
between our two countries.
It is also misleading to allege that Canada has unfairly imposed duties
on U.S. potatoes exported into the province of British Columbia. Anti-dumping
legislation is in place in both the U.S. and Canada and decisions
by either the USITC or the CITT are based on facts. They are not used
as a trade barrier. The US has utilized their legislation more often
than any other country in the western world. The filing of trade complaints
against Canadian agriculture sectors, including, wheat, pork, beef,
raspberries and tomatoes, are well documented. Duties on exports of
potatoes marketed into BC are only implemented when the selling price
by the U.S. is below their cost of production. When selling at or
above their cost of production, there is a free and open market. Even
despite the anti-dumping order that is in place, the U.S. industry
maintains a 50 percent market share within the Province of BC. I suspect
that if any Canadian industry captured 50 percent of any U.S. market,
there would be trade actions implemented immediately.
There is no doubt that the potato industry in North America is under
pressure, as is most of agriculture. We must find a way to move forward
in a sustainable way by working together. If we point fingers at each
other as producers, we will only exacerbate the situation. It is only
the foolhardy farmer that continues to expand and think that those
with deep pockets will survive.
The facts are that we operate in a multi-billion dollar industry with
profits being shared by all facets of the supply chain, except the
producer. This is not a fact that is restricted to potatoes as it
is all too common throughout agriculture in both countries. For us
as producers to be blaming each other detracts from the focus required
to get our industry back on track. It is time for industry leadership
in both countries to show some collective wisdom, cease playing politics
and lower the rhetoric. The potato industry in North America is completely
integrated, from processors to retailers. We are innovators and entrepreneurs
– let’s start working together to find solutions.
Wayne Dorsey, Chairman
Potato Committee
Canadian Horticultural Council
